Today’s Market View – Adriatic Metals, Bushveld Minerals, Condor Gold, And More…

SP Angel . Morning View . Wednesday 26 10 22Copper prices climb towards monthly highs on weaker dollarMiFID II exempt information – see disclaimer below Zambia copper exploration opportunityWe are looking for investment into a private copper explorer with four highly prospective licences in Zambia, near major mines or significant exploration targets.

Today's Market View - Adriatic Metals, Bushveld Minerals, Condor Gold, and more...

SP Angel . Morning View . Wednesday 26 10 22

Copper prices climb towards monthly highs on weaker dollar

MiFID II exempt information – see disclaimer below 

Zambia copper exploration opportunity

  • We are looking for investment into a private copper explorer with four highly prospective licences in Zambia, near major mines or significant exploration targets.
  • One license is contiguous with First Quantum’s Sentinel copper and Enterprise nickel mines with whom they have a Technical Cooperation Agreement.
  • Historic drilling on the licence includes 0.7% copper over 1m and 0.2% nickel over 3m. Geophysics in 2021 & 2022 advanced project toward identifying drill targets.
  • A large licence with multiple copper targets. Samples from small artisanal mines assayed 15.8% copper, 0.57g/t gold and 4.87% copper, 18.3 g/t gold.
  • A highly prospective licence acquired in 2022 on the Western Foreland trend which hosts the giant Kamoa-Kakula mine.
  • IPO documentation has been prepared for listing when market conditions improve.
  • All licences are 100% owned with Zambian partners significant shareholders in the company.


Adriatic Metals PLC (LSE:ADT1, ASX:ADT, OTCQX:ADMLF)* – Positive step-out drilling results at Rupice
Bushveld Minerals Limited (AIM:BMN, OTC:BSHVF)* – Management call reiterates positive margins at current price levels
Condor Gold PLC (AIM:CNR, TSX:COG, OTC:CNDGF)* – Publication of the La India open-pit mine feasibility study
First Quantum Minerals (TSX:FQM) – $1.25bn Kansanshi expansion approved
Shanta Gold Limited (AIM:SHG, OTC:SAAGF) – FY22 production/cost guidance maintained with Singida on time/budget for first production Mar/23
Sovereign Metals Ltd (ASX:SVM, AIM:SVML) – Aircore drilling hits extends depth of mineralisation at Kasiya, Malawi

Gold climbs on welcome relief from weaker US Dollar and Treasury yields

  • Gold has rallied 1.8% from yesterday’s lows of $1,638/oz nearing $1,670/oz this morning.
  • Bullion has been supported by both a weaker dollar, down 2.5% in 3 weeks, and US Treasuries, with the US10 year yield down 4% over the same period.
  • Soaring yields have hit non-interest-bearing gold hard, with the dollar’s multi-decade strong rally also weighing on prices.
  • Weaker US data this week has given traders hopes of a less aggressive series of Fed rate hikes going forward.
  • Consumer confidence is down in October to a 3-month low and home prices fell the most since 2009, as Americans continue to struggle with the new inflationary and high rates regime.
  • The dollar has been considered a viable safe haven alternative to gold this year, however this has weakened in recent weeks against a climbing Pound and Euro.
  • Further signs of a dovish shift from Fed officials will be supportive of gold.

Copper – US$ 7,586/t – Expect copper prices to rise from December into the new year as potential for physical shortages gains
Copper prices climb towards monthly highs on weaker dollar, despite soaring inventories

  • Copper prices have climbed 2.5% on the month after volatile trading that has seen prices whipsaw between $7,350/t and $7,860/t.
  • The metal’s relative strength has been supported by a weaker US dollar, with the dollar index down 2.2% this month.
  • Global copper inventories have climbed 44% since mid-September but remain close to 40% lower than the past 5 years’ seasonal average.
  • Chinese copper output for September rose 5.8% yoy to 946kt.
  • CRU expects the copper market to hit a surplus of 130kt next year vs 2022’s expected 200kt deficit.
  • Copper futures remain in backwardation; with the physical premium also falling from September highs.
  • Traders are currently weighing up the impact of an expected slowdown in demand next year from a global recessionary environment.
  • A weaker yuan is also expected to weigh on copper prices by hitting Chinese buyers’ purchasing power.
  • The longer-term supply picture remains structurally bullish for copper, however short-term headwinds will continue to create volatility for the metal.

Tin inventories slide following year-long jump that cratered prices

  • LME tin stocks have fallen 12.5% after hitting 2-year peaks in September.
  • Inventories had climbed 700% from lows in October 2021.
  • Soaring inventories and weaker demand outlook has seen tin prices fall over 60% from peaks in March.
  • Chinese buyers have ramped up tin imports in recent months as Indonesia has increased warnings of an export ban.
  • Tin smelting producers in major Chinese region Yunnan have been hit by power rationing, weighing on prices.
  • Soldering companies, the main end users of tin, had lowered demand outlook this month.
  • Tin prices have been on a wild ride over the past two years, with supply bottlenecks sending physical premiums to $6,500/t in February 2021 on rock-bottom stocks.
  • Prices have now settled around the $18,500/t mark. The pre-covid average price from 2012-2019 was $19,667/t.

Dow Jones Industrials +1.07% at 31,837
Nikkei 225 +0.67% at 27,432
HK Hang Seng +0.77% at 15,282
Shanghai Composite +0.78% at 3,000


US – Consumer sentiment came in lower than expected as inflation and interest rate hikes weigh on confidence.

  • Conference Board Consumer Confidence: 102.5 v 108.0 September and 105.9 est.
  • Conference Board Present Situation: 138.9 v 149.6 September.
  • Conference Board Expectations: 78.1 v 80.3 September.

China – Wuhan district orders 900,000 residents to stay at home from today on new Covid cases (Bloomberg).

  • All non-essential businesses were told to shut with the lockdown planned to last at least until Sunday.
  • Wuhan reported 18 Covid cases on Tuesday.
  • The news highlights authorities’ commitment to the zero Covid strategy that uses lockdowns, mass testing and travel restrictions to contain the virus’s spread.

Chinese steel giant’s gloomy outlook points to country’s dire industrial situation

  • China’s largest steel mill, Baoshan, saw Q3 net income fall 74% with steel demand hit by Beijing’s crackdown on the property sector.
  • Real estate accounts for over 40% of China’s steel demand with new home sales plunging and 200-300,000 people withholding mortgage payments on unfinished apartments.
  • Baosteel does not expect a reversal of this downward trend before 2023 and expects steel demand in China to fall over 5% this year.
  • 70% of China’s steel mills were loss making in July, with Angang, reported new losses in Q3 for the first time since 2015. (China Iron and Steel Association)
  • EV silicon steel sales rose 61% helping Baoshan sales of silicon steel, used heavily by the renewable sector, up 11% since January.

Report indicates Chinese state banks have been ordered to buy equities to contain selling

  • The possible public humiliation of former President Hu Jintao who was escorted from his desk next to President Xi a the CCP meeting has caused consternation in China.
  • Chinese state media state the former president was not feeling well though many speculate he may have challenged President Xi’s bid for a third term in office.
  • Hu Jintao appeared to reach for a sheet of paper on President Xi’s folder but was quickly moved aside by an official steward.
  • Hu looked distressed as he was escorted from the meeting.

Canada – The central bank is set to deliver a sixth consecutive rate hike today with markets pricing in a 75bp move.

  • That would bring the benchmark to 4%, a level last seen since Mar/08.
  • Markets are anticipating that would be the last outsized increase in rates followed by two smaller 25bp moves in coming months.

Lithium – High prices for lithium precursors are seeing Chinese producers seeing switching from ceramics production to lithium slug processing, Benchmark Minerals writes.

  • The ceramics industry can use lithium slag waste and turn it into a useful stock to be further converted into lithium carbonate.
  • The news further highlights market shortage of lithium as Li-ion battery manufacturers look for sources of supply.

Chilean government presents revamped royalty bill to Senate in bid to raise taxes

  • Chile’s government has presented a bill to the Senate’s Mining and Energy Committee, which many fear will make the country a less attractive jurisdiction for investment if passed.
  • The bill proposes:
    • a flat 1% ad valorem tax on copper mining that exceeds 50,000t, though if the operating margin is negative this will not be paid
    • Tax will then be applied on the operating margin, fluctuating between 8% and 26%
  • The government estimates that the mining royalty will help collect an additional 0.6% of GDP.
  • Chilean think tank Centro De Estudios Publicos (CEP) say the new proposal would increase the total tax burden for large copper miners to between 47% and 74% on earnings.
  • In a report, CEP commented: “the Mining Royalty proposal as it is in Congress could put the country’s competitiveness at risk to attract new mining investment. With this also the tax collection in the medium and long term.”

Gabon looks to fund hydro-power plant expansion with Africa’s largest sovereign green bond

  • Gabon is eyeing the sale of a $100-200m green bond sale, through the marketing of its forest sustainability.
  • The sale would fund an expansion of hydro power.
  • Gabon is also eyeing a ‘blue bond’ sale for spending on marine conservation.
  • The market for green bonds has taken a hit this year.


US$0.9984/eur vs 0.9861/eur yesterday. Yen 147.57/$ vs 148.94/$. SAr 18.140/$ vs 18.470/$.  $1.150/gbp vs $1.129/gbp. 0.644/aud vs 0.633/aud. CNY 7.264/$ vs 7.306/$.

Dollar Index        110.73 / -2.00% on week

Commodity News

Precious metals:         

Gold US$1,665/oz vs US$1,649/oz yesterday

Gold ETFs 95.4moz vs US$95.5moz yesterday

Platinum US$927/oz vs US$923/oz yesterday

Palladium US$1,957/oz vs US$1,993/oz yesterday

Silver US$19.55/oz vs US$19.20/oz yesterday

Rhodium US$14,100/oz vs US$14,100/oz yesterday

Base metals:   

Copper US$ 7,586/t vs US$7,523/t yesterday

Aluminium US$ 2,268/t vs US$2,176/t yesterday

Nickel US$ 22,350/t vs US$21,960/t yesterday

Zinc US$ 2,916/t vs US$2,950/t yesterday

Lead US$ 1,888/t vs US$1,881/t yesterday

Tin US$ 18,580/t vs US$18,340/t yesterday


Oil US$92.2/bbl vs US$93.1/bbl yesterday

  • Crude oil prices edged higher despite API data showing a 4.5mb build in US crude inventories last week (+0.2mb expected), with todays EIA data expected to show a 1mb build.
  • Near-term European energy prices remain subdued compared to month-ahead prices due to above-average temperatures across the continent and with gas storage sites near capacity.
  • The spot price of natural gas in West Texas fell below zero yesterday as scheduled pipeline maintenance and the extended closure of the Freeport LNG terminal reduced regional transportation capacity.

Natural Gas US$5.684/mmbtu vs US$5.173/mmbtu yesterday

Uranium UXC US$53.35/lb vs US$53.35/lb yesterday


Iron ore 62% Fe spot (cfr Tianjin) US$88.2/t vs US$90.5/t

Chinese steel rebar 25mm US$542.1/t vs US$541.3/t

Thermal coal (1st year forward cif ARA) US$270.0/t vs US$270.0/t

Thermal coal swap Australia FOB US$384.0/t vs US$383.0/t

Coking coal swap Australia FOB US$313.0/t vs US$311.0/t


Cobalt LME 3m US$51,955/t vs US$51,955/t

NdPr Rare Earth Oxide (China) US$92,645/t vs US$91,377/t

Lithium carbonate 99% (China) US$75,425/t vs US$73,991/t

China Spodumene Li2O 5%min CIF US$5,900/t vs US$5,800/t

Ferro-Manganese European Mn78% min US$1,234/t vs US$1,218/t

China Tungsten APT 88.5% FOB US$32.0/kg vs US$32.0/kg

China Graphite Flake -194 FOB US$860/t vs US$860/t

Europe Vanadium Pentoxide 98% 7.4/lb vs US$7.4/lb

Europe Ferro-Vanadium 80% 30.65/kg vs US$30.65/kg

China Ilmenite Concentrate TiO2 US$309/t vs US$307/t

Spot CO2 Emissions EUA Price US$73.4/t vs US$67.9/t

Brazil Potash CFR Granular Spot US$620.0/t vs US$620.0/t

Company News

Adriatic Metals PLC (LSE:ADT1, ASX:ADT, OTCQX:ADMLF)* 129p, Mkt cap £334m – Positive step-out drilling results at Rupice

  • Adriatic reports positive drill results to the Northwest of the existing Rupice Mineral Resource, with assays reported for 9/19 holes completed year-to-date.
  • Highlights from the programme include:
    • Hole BR-04-22 – 32.5m at 78g/t Ag, 10.1% Zn, 4.7% Pb, 0.8g/t Au, 0.3% Cu, 69% BaSO4, 0.1% Sb from 285m.
    • Hole BR-06-22 – 18m at 242 g/t Ag, 12.3% Zn, 8.4% Pb, 1.4 g/t Au, 0.6% Cu, 42% BaSO 4 , 0.1% Sb from 245m.
    • Hole BR-07-22 – 7m at 545 g/t 12.3% Zn, 8.1% Pb, 3.1g/t Au, 0.7% Cu, 32% BaSO 4 , 0.1% Sb from 239m.
    • Hole BR-09-22 – 11.8m at 307g/t Ag, 13.9% Zn, 10.4% Pb, 1.5 g/t Au, 2.2% Cu, 18% BaSO 4 , 0.2% Sb from 284m.
    • Hole BR-13-22 – 19.9m at 421g/t Ag, 5.6% Zn, 4.0% Pb, 1.7g/t Au, 0.4% Cu, 32% BaSO 4 , 0.1% Sb from 207m.
  • These latest results show continuity up-dip and down plunge from previous reported drilling, with known mineralisation extended 83m up-dip, while hole BR-05-22 confirmed continuity within the upper zone of mineralisation.
  • Adriatic is awaiting assays for six additional holes at Rupice.
  • The company expects to continue drilling ahead of a maiden inferred MRE expected in Q1 2023.

*An SP Angel mining analyst has visited Adriatic Metals operations in Bosnia

Bushveld Minerals Limited (AIM:BMN, OTC:BSHVF)* – 4.64p, Mkt cap £58m – Management call reiterates positive margins at current price levels

Valuation 23p

  • Bushveld management answered some tough questions on yesterday’s management call with analysts and investors.
  • Bushveld CEO, Fortune Mojapelo, highlighted the work done to achieve positive EBITDA in 2022 despite tough and challenging conditions over the past two years.
  • Mojapelo sees the positive EBITDA continuing into 2023 with sufficient cash to allow the repayment of the Orion convertible.
  • The group has prioritised the development of production at Vanchem (Kiln 3) ahead of previous plans to raise production at Vametco.
  • The redevelopment of Kiln 3 was evaluated to be the lowest cost route to restore positive margins for the group versus higher than expected capital costs evaluated in feasibility study work for future expansion at Vametco.
  • Load shedding: The CEO of  ESKOM has warned consumers to brace for regular load shedding over the next 18 months.
  • Vametco has diesel backup and can manage relatively well but the generators at Vanchem cannot make up for the loss of power leading to lost production and lower recoveries.
  • The load shedding issue will affect all South African industry but should help drive demand for many more self-generation ‘mini-grid’ instillations with Vanadium Redox Flow Battery storage units.
  • Mini grid: Bushveld has started construction of the new ‘mini grid’ at Vametco which should demonstrate the viability of the solar PV VRFB battery instillation and generate significant sales.
    Q3 operational results – Kiln 3 drives performance through the third quarter for Bushveld
  • Bushveld report a 52% increase in Q3 production to 1,016mtV vs 668mtV in Q2 supported by improved performance at the newly refurbished Kiln 3 at Vanchem.
  • Group Q3 production was hit by lower recovery rates from the kiln into Modified Vanadium Oxide at Vametco.
  • Cash costs fell to $29.3/kgV for Q3 2022 vs Q2 2022 at $31.0/kgV on higher production but were still 20.8% higher on Q3 in 2021 due to higher input costs.
  • Vaemtco kiln recoveries fell to 70.3% in Q3 from 77% in Q2 and 72,9% for the year-to-date accounting for the rise in costs.
  • Vanchem kiln recoveries dipped to 71.4% in Q3 vs 72.8% in Q2
  • Sales: Bushveld saw a significant 24% increase in sales to 1,034mtV in Q3 vs 787mtV in Q2 and 857mtV in Q1.
  • Sales generally lag production by around four to six weeks indicating that around half Q4s increased production will be sold in Q1 2023.
  • Guidance: for the full year has been maintained at 3,900-4,100mtV requiring the group to do 1,243-1,443mtv in the fourth quarter.
  • Management state the group remains “On track to achieve an annualised steady state production run rate of 5,000 mtVp.a. – 5,400 mtVp.a. by the end of 2022.”
  • Loadshedding: Fortune Mojapelo, Bushveld’s CEO, highlights the severity of the loadshedding in South Africa through the third quarter with 75 events totalling 218 hours.
  • The loss of power limited Vanchem more than Vametco due to the nature if its connection to the grid with September proving to be the worst month for losing grid power.
  • “The near-term prognosis from Eskom does not indicate significant improvement and at Vanchem, where we are primarily affected, we will continue to use diesel generators during loadshedding periods.”
  • “Despite these challenges, we remain on track to achieve our annualised steady state production target by the end of 2022, as well as our cost guidance for each asset.”.
  • Forex: Q3 saw a significant fall in the rand to 17/USD from 15.5 in Q1. The South African rand continues to depreciate to 18.45/USD today.
  • The weaker rand is able to offset much of the rise in energy and other raw material costs and we expect the ongoing depreciation of the rand to have a positive impact on earnings going forward.
  • Vanadium prices:
    • US ferro-vanadium prices have risen recently to US$39.75 for 80% V.
    • Chinese ferro vanadium prices rose by 29% to CNY185,500/kgV ($254/kgV) since the start of August.
    • European Ferro-Vanadium (80%) are 9% lower at 30.65/kg since the first of August
  • Valuation:  Our NPV valuation on our forecast Bushveld cash flows values the group at 23p. This includes ~10p/s for the electrolyte plant being built by Bushveld Energy.  We see the future rollout of VRFB ‘Vanadium Redox Flow Batteries’ in South Africa for the storage of renewable energy in as a significant driver for vanadium pentoxide demand for the business going forward.
  • Vametco’s solar PV mini grid, should provide an important demonstration site for other South African businesses to follow.

Conclusion:  Bushveld management are working toward the production of 5,000-5,400mtVpa next year. The team have also worked out a route to 8,000mtVpa in a previously published four stage plan.

Rising production alongside the long-awaited collapse of the South African rand is offsetting rising power and material costs while rising vanadium prices in the US and China offer the prospect for stronger earnings to come.

(Dec year end)                 US$      2019     2020     2021     2022E     2023E     2024E

Vanadium price                $/kg         55          25      37.6           40           38            40

Vanadium Production       mtV     1,859     2,685    3,592     3,942      5,082       5,194

Vanadium Sales               mtV      2,392     3,842   3,314     3,942      5,260       5,194

Sales+                              $m       116.5      90.0    106.9     161.0      204.1        212.1

Cost of Sales                    $m      -45.8      -73.4    -83.4     -108.5     -129.2       -131.6

Admin costs                      $m      -38.1      -31.5    -20.9     -18.4       -17.7         -17.8

Other costs                       $m      -4.2         -5.5     -12.5      -15.7       -20.6         -20.8

Depreciation                     $m      -10.4      -17.9     -19.4     -18.5       -20.0         -20.0

Operating profit                 $m        22.3     -32.8     -29.3      15.5         37.2         42.7

Finance & other                $m        1.9         -4.7     -11.3       -10.7       -9.9          -5.4

Pre-tax profit                     $m         83.3     -37.5     -46.8        4.7        27.3         37.3

Tax                                    $m       -14.0       0.5        4.7        -1.9        -1.9           -4.7

Post-tax profit                  $m         69.2      -37.0     -42.1       2.9         25.4          32.6

EPS                                  $c/s      5.51                    -4.22      -0.66       0.55          1.10

PE                                     x          6.4           –              –            –           8.4             4.2

EV/EBITDA                       x          13.6         –              –           4.4         2.6            2.3

EBITDA                           $m         28.4      -20.4       -7.5        18.3       36.6          42.0

Source: SP Angel, Bushveld, Vametco & Vanchem

*SP Angel act as nomad and broker to Bushveld

Condor Gold PLC (AIM:CNR, TSX:COG, OTC:CNDGF)* 24.5p, Mkt Cap £40.9m – Publication of the La India open-pit mine feasibility study

  • Condor Gold has confirmed that its feasibility study into the development of the La India open-pit development within its wider La India project in Nicaragua has been filed with the Canadian archive, SEDAR ( and is also available in the ‘Technical Reports’ section of the company’s website .
  • The study was prepared under the coordination and supervision of the independent consulting firm SRK Consulting (UK) in compliance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum as “required by … [Canada’s] …National Instrument 43-101 – Standards of Disclosure for Mineral Projects
  • Summary highlights of the feasibility study were published on 12th September.
  • The study, which does not include the development of the nearby satellite operations at America, Mestiza and Central Breccia or the emerging Cacao deposit, showed that the La India open-pit is expected to deliver an after-tax NPV5% of US$86.9m and IRR of 23% (at a gold price of US$1,600/oz) from the investment of US$105.5m to mine a probable ore-reserve of 602,000oz of gold and 1.25moz of silver over an 8.4 years mine life at La India and access to the more detailed information behind these headlines will provide a greater insight into the development plan.
  • Sensitivity analysis disclosed in September’s announcement indicates that at a higher gold price of US$2,000/oz, post-tax NPV5% increases by around 2.4x, to US$205.2m generating an IRR of 43%.
  • The September announcement described an open-pit mine, which is already permitted, and is expected to mine a total of 7.3 mt of ore grading 2.56 g/t Au and associated 96.7 mt of waste at an average waste:ore ratio of 13.2:1 at an average ore production rate of 1.3mtpa producing gold at an average US$1,039/oz on an all-in-sustaining cost basis.  Conventional truck-and-shovel mining will use contractors.
  • Ore will be treated at a nominal rate of 0.89mtpa over 9 years to produce an average of 81,545oz of gold for the first five years of production with higher grades treated in the earlier years and lower grade material stockpiled for later processing.
  • As well as the reserves at La India, the broader project area hosts further resources mineable by open-pit methods at America, Mestiza, Central Breccia and Cacao deposits which are within the catchment of the La India plant site and contain “an aggregate 206 Kt at 9.9 g/t gold for 66,000 oz in the indicated Mineral Resource category and 2.1Mt at 3.3 g/t gold for 223,000 oz gold in the inferred Mineral Resource category”.
  • Underground mineral resources at La India, America, Mestiza, Central Breccia San Lucas, Cristalito-Tatescame, and Cacao add a further “979Kt at 6.2 g/t for 194,000 oz gold in the indicated Mineral Resource category and 5.6Mt at 5.0 g/t gold for 898,000 oz gold in the inferred Mineral Resource category”.
  • Today’s announcement explains that “Condor’s plan is to materially expand production with a stage 2 expansion and is working to convert existing Mineral Resources into Mineral Reserves and to develop an associated integrated mine plan”.
  • We speculate that the expansion will be able to reap the benefits of the initial process plant development and could therefore be implemented without significant additional capital expenditure for processing although we imagine that there will be further investment required for the underground and surface infrastructure which could be funded, at least in part, from the cash-flow of the La India open-pit.

Conclusion: We welcome the opportunity to gain an improved insight into the La India open-pit mine development which, given Condor Gold’s phased development approach, should provide a solid economic and technical base for the wider development of the satellite open-pits and the longer-term underground mining opportunities within the La India district where continuing exploration may be expected to add to the development pipeline.

*SP Angel act as a broker to Condor Gold

First Quantum Minerals (TSX:FQM) C$25, Mkt cap C$17bn – $1.25bn Kansanshi expansion approved

  • First Quantum Minerals (TSX:FQM) has released its quarterly results for the three months ended September 30, 2022.
  • FQM produced 194,974t of copper over the period, up 1.2% on the previous quarter.
  • The company reported gross profit of $302m and EBITDA of $583m.
  • Guidance: Total copper production guidance for 2022 has been lowered from 790–855kt to 755-785kt mainly attributable to the lower production at Kansanshi.
    • At Cobre Panama, record mill throughput of 22.4mt of ore with an average head grade of 0.46% was processed during Q3, with full year guidance narrowed to 340-350kt.
    • Kansanshi is expected to 140-150kt this year, with Q3 production 25% lower than the one before on lower grades and flooding of main pit.
    • Sentinel delivered its best quarterly production of the year with 64,120t, up 22% on Q2, with guidance for the full year at 240-250kt.
  • Costs: Copper C1 cash costs for 3M and 9M at $1.82/lb and $1.72/lb, respectively.
    • The copper C1 cash cost guidance range has increased from $1.45 – $1.60/lb to a range of $1.70 – $1.80/lb.
    • Cost increases are attributed to lower production at the Zambian operations and broad cost inflation, which continued to increase further during the third quarter and remained at elevated levels.
    • Commenting on broad cost inflation: “Market rates for fuel, sulphur, explosives and freight had reduced by the end of the quarter but there is a lag before such market changes flow through to unit costs. Employee costs rose during the third quarter as the Company realigned labour rates to current market levels and adjusted for cost-of-living changes in some jurisdictions.”

Shanta Gold Limited (AIM:SHG, OTC:SAAGF) 12.1p, Mkt Cap £127m – FY22 production/cost guidance maintained with Singida on time/budget for first production Mar/23

  • Gold production amounted to 19.5koz (Q2/22: 17.5koz) reflecting higher grade throughput at the NLGM.
  • Output was 12% less than budgeted due to poor grinding efficiency affecting gold recovery.
  • The decrease in efficiency was partly attributable to poor cyclone classification due to unavailability of the cyclone spares, ore hardness and increased mil throughput.
  • Additionally, ~11kt of ore grading 4.29g/r containing 1.6koz was made permanently unavailable for mining due to ground stability at the Bauhinia Creek 850 level of the crown pillar.
  • NLGM is now expected to come in at the lower end of the FY22 guidance (68.0-76.0koz).
  • AISC averaged $1,207/oz (Q2/22: $1,142/oz) during the quarter with inflationary pressures observed in H1/22 continuing including increased prices for steel, consumables, power and diesel.
  • Cost inflation contributed ~$110/oz to AISC versus budget.
  • FY22 guidance reiterated for $1,150-1,275/oz in AISC.
  • Exploration spend has been minimised for the next 5 months to prioritise cashflows during Singida development works ($12m forecast in capex to be spend at Singida through to commissioning in Mar/23).
  • VAT receivables stood at $27.1m (Q2/22: $27.7m).
  • Singida remains on track and on budget with 78% of the project development completed (Q2/22: 63%).
  • Crusher commissioning is ongoing with the ball mill commissioning planned for Q4/22; open pit mining delivered 128kt at 2.34g/t containing 9.6koz to the ROM stockpile.
  • At West Kenya, infill and step out drilling continued with 65% of total planned meters over three phases that started in 2021 are now complete.
  • Closing cash and available liquidity stood at $14.0m (Q2/22: $14.3m) including ~3.9koz contained in unsold dore with $21.3m held in debt (Q2/22: $5.6m), following the $20.0 senior debt financing drawdown during the quarter.

Sovereign Metals Ltd (ASX:SVM, AIM:SVML) 21.5p, Mkt Cap £101m – Aircore drilling hits extends depth of mineralisation at Kasiya, Malawi

  • Sovereign Metals reports that recently completed aircore drilling has shown rutile mineralisation extends beyond the current pit-shells and beneath the current mineral resources at its Kasiya rutile and graphite project in Malawi.
  • The company has now drilled 191 aircore drillholes, including the initial 32 hole “sighter phase” which “extend substantial zones of high-grade rutile mineralisation to depth beneath initial planned open pit shells” which averaged 15m depth.
  • The new drilling “results confirm that rutile and graphite mineralisation is continuous from surface down to the top of saprock generally at 20-25m vertical depth in key mineralised areas … [and]… highlight the potential for the mining pits to be extended at depth”.
  • Currently results have been received for 61 holes with results for a further 98 holes representing 2,548m “pending”.  Among the results highlighted in today’s announcement are:
  • Among the drilling results highlighted in today’s announcement are:
    • An intersection of 23.0m at an average grade of 1.01% rutile from surface in hole KYAC-0039; and
    • An intersection of 22.0m at an average grade of 1.08% rutile from surface in hole KYAC-0042; and
    • An intersection of 23.0m, at an average grade of 1.05% rutile from surface in hole KYAC-0044; and
    • An intersection of 20.0m at an average grade of 1.22% rutile from surface in hole KYAC-0045; and
    • An intersection of 26.0m at an average grade of 1.04% rutile from surface in hole KYAC-0048; and
    • An intersection of 20.0m at an average grade of 1.23% rutile from surface in hole KYAC-0051; and
    • An intersection of 21.0m at an average grade of 1.06% rutile from surface in hole KYAC-0052; and
    • An intersection of 23.0m at an average grade of 1.03% rutile from surface in hole KYAC-0062; and
    • An intersection of 28.0m at an average grade of 1.07% rutile from surface in hole KYAC-0069; and
    • An intersection of 18.0m at an average grade of 1.26% rutile from surface in hole KYAC-0078; and
    • An intersection of 20.0m at an average grade of 1.18% rutile from surface in hole KYAC-0088; and
    • An intersection of 24.0m at an average grade of 1.02% rutile from surface in hole KYAC-0090.
  • Some of these intersections contain higher grade sections with grades of up to almost 1.7% rutile over intervals typically between 3-5m.
  • The current resource estimate for Kasiya, reported at a cut-off grade of 0.7% rutile, shows an indicated resource of 662mt at an average grade of 1.05% rutile with an additional inferred resource of 1,113mt at an average grade of 0.99% rutile.
  • Managing Director, Dr. Julian Stephens, said that “the deep air-core program … is confirming the potential for several pit expansions at depth. It remains a very busy time for the Company as we continue to receive drilling results and our PFS is approaching a peak level of activity”.

Conclusion: The completion of the deeper aircore drilling at Kasiya shows depth extensions to the rutile mineralisation which, when all the drilling results have been received and incorporated into resource estimates seem likely to expand and possibly upgrade the existing indicated and inferred estimate of approximately 1.8bn tonnes at an average grade of 1.01% rutile and 1.32% graphite.

No.1 in Copper:  “The winner of the 2020 Fastmarkets Apex contest for copper was the team at SP Angel comprising John Meyer, Sergey Raevskiy and Simon Beardsmore, with an accuracy score of 93.8%”

No1. In Gold:  “SP Angel’s trio took the top spot for the gold price prediction throughout the year, with an accuracy score of 97.59%”

The SP Angel team also ranked 1st in Palladium, 3rd in Tin and 5th in Silver in the fourth quarter of 2020


John Meyer – – 0203 470 0490

Simon Beardsmore – – 0203 470 0484

Sergey Raevskiy – – 0203 470 0474

Joe Rowbottom – – 0203 470 0486


Richard Parlons – – 0203 470 0472

Abigail Wayne – – 0203 470 0534

Rob Rees – – 0203 470 0535

Grant Barker – – 0203 470 0471

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*SP Angel are the No1 integrated nomad and broker by number of mining brokerage clients on AIM according to the AIM Advisers Ranking Guide (joint brokerships excluded)

+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.

Sources of commodity prices
Gold, Platinum, Palladium, Silver – BGNL (Bloomberg Generic Composite rate, London)
Gold ETFs, Steel – Bloomberg
Copper, Aluminium, Nickel, Zinc, Lead, Tin, Cobalt – LME
Oil Brent – ICE
Natural Gas, Uranium, Iron Ore – NYMEX
Thermal Coal – Bloomberg OTC Composite
Coking Coal – SSY
RRE – Steelhome
Lithium Carbonate, Ferro Vanadium, Tungsten, Spodumene, Ferro-Manganese, Graphite – Asian Metal


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